India is a much better market than other emerging markets as it is one of the best growth stories, UBS Investment Bank’s Head of Global Emerging Markets Equity Strategy, Geoffrey Edwin James Dennis said to CNBC-TV18 on Monday. Dennis said he expects a slowdown in the emerging markets over the next couple of weeks but UBS is bullish on India amongst its portfolio of emerging markets.
Since February 1 this year, Indian Benchmark Indices BSE Sensex and NSE Nifty 50 have surged 5.9% and 5.77% respectively, on account of increased funds flow from Foreign Portfolio Investors and the unprecedented victory of ruling BJP in the state assembly election of Uttar Pradesh.
He said that the emerging markets losing momentum is not a reaction to the poor US payroll numbers released on Friday, 7 April, but rather a reaction to the Geo-political tensions. This pushed the dollar quite a bit higher over the last two-three trading days, which was not a surprise, as UBS already believed that these funds would respond to moves of the market. So the emerging markets losing a little bit of ground over the last few days is not a very serious concern as they are just two percent down from the highs of the year, he said.
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Dennis said that although situation has got a little tensed, referring to the Geo-political tensions, he hopes that from here on it will be contained and eventually the emerging markets would start to rally again.
Earlier last week, veteran emerging markets investor Mark Mobius said that the he is finding small-cap stocks in India interesting as of now, in the face of surge in the valuations of the large cap companies shares. However, in the interview with Bloomberg TV, Mobius, who has been investing in the emerging markets for over four decades now, said that in some areas less availability of liquid funds is a cause for concern.
The large number of listed companies available for trade on Indian bourses allows investors to find lots of good bets, he said. There are about 5,500 stocks listed and available for trade on the Bombay Stock Exchange – Asia’s oldest bourse.
Further, Mobius said that the impending introduction of GST (Goods and Services Tax) will benefit a lot of companies, making them more attractive investment bets.